Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249021 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9476
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper develops a new sufficient statistic approach for estimating the marginal internality from sin good consumption. It models a biased consumer who faces uncertain health harms and receives mandatory health insurance. I show that the marginal internality can be identified by observing how sin good demand reacts to changes in health insurance coverage. The method does not require to recover the true willingness to pay for the sin good or to elicit consumers’ biases using surveys. I calibrate the model to sugary drinks consumption. My results are consistent with studies that use survey-based measures of biases.
Subjects: 
marginal internality
self-control
biased beliefs
JEL: 
D11
D62
H21
H31
I12
I13
I18
Document Type: 
Working Paper
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